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Position under the Service Tax Regime
Position under the GST Regime
The Present Ruling in Mohit Minerals Private Limited vs. Union of India
The Petitioner had challenged the levy of the IGST on the estimated component of the Ocean Freight paid for the transportation of the goods by the foreign seller as sought to be levied and collected from the Petioners as the importer of the goods. The Petitioner inter alia submitted that:
Whereas, the Revenue contended that:
Taking cognizance of the submissions made by both the sides, the Hon'ble Gujarat HC made the following observations:
The Hon'ble Gujarat HC further beautifully captured the rationale for not levying service tax on ocean freight services. It was clarified that the value of the imported goods for the purpose of payment of customs duties includes the amount of freight paid on their inward transportation. The tax on such transportation service, instead of being collected from the supplier of service is collected from the importer of goods by including the same in the value of imported goods.
Basis the above observations of the Hon'ble Gujarat HC declared the impugned notifications to be unconstitutional, lacking legislative competency.
As a result of this judgment, the provisions levying IGST on ocean freight have been held redundant. Accordingly, the fate of ITC availed by importers, who had abided by the impugned notifications, is at stake. Accordingly, it is contemplated that:
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